Colombian economic research institution Eafit has cautioned that maintaining interest rates above 13% could worsen the country’s primary deficit and trigger further credit rating downgrades. Colombia lost its investment-grade rating in 2021, and major credit rating agencies have consistently expressed concerns regarding its repayment capacity since then. The warning suggests that high interest rates, while potentially addressing inflation, could simultaneously exacerbate fiscal pressures. Eafit’s analysis indicates a potential negative feedback loop where increased borrowing costs contribute to a larger deficit, prompting agencies to further lower Colombia’s creditworthiness. This could lead to higher borrowing costs in the future and limit access to international financial markets. The report underscores the delicate balance Colombia faces in managing its economic policies amid global financial uncertainty. Continued downgrades would negatively impact investor confidence and economic stability.